Sub-Saharan Africa’s off-grid energy sector just got a significant capital infusion, and the structure behind it is worth understanding on its own terms.
At the Africa Energy Forum in Cape Town this week, Inspired Evolution announced the commercial launch of Zafiri, a USD 176 million investment vehicle built to channel long-term equity into private companies delivering electricity to communities that sit beyond national grids. The launch is notable less for its headline number than for its structure and the list of institutions that assembled behind it: IFC, the African Development Bank Group (including its Sustainable Energy Fund for Africa), The Rockefeller Foundation, the Trade and Development Bank Group, the Nordic Development Fund, the MacArthur Foundation, and FirstRand, the only commercial bank in the founding group.
Zafiri is designed as a blended permanent-capital vehicle, meaning it combines concessional and commercial capital with no fixed end date, allowing it to hold equity positions in companies for as long as needed rather than under the pressure of a typical fund’s exit timeline. Inspired Evolution, the Cape Town-headquartered climate investment firm that already manages over USD 1.15 billion in clean energy assets across 21 African countries, was mandated by the founding shareholders to run it.
The targets attached to the vehicle are substantial. Zafiri aims to help connect more than 10 million people to electricity by 2030, with that figure rising to 30 million over the vehicle’s lifetime. Capital will flow into distributed renewable energy companies and projects spanning mini-grids, solar home systems, productive-use energy solutions, and clean cooking enterprises, with at least half of the platform’s capital earmarked for mini-grids, solar home systems, and clean cooking specifically.
Why distributed renewable energy, and why now
The rationale ties directly to Mission 300, the joint World Bank Group and African Development Bank Group initiative aiming to connect 300 million people in sub-Saharan Africa to electricity by 2030, with backing from The Rockefeller Foundation, the Global Energy Alliance for People and Planet, and Sustainable Energy for All. Distributed renewable energy, rather than grid extension, is expected to do much of the heavy lifting toward that target. Dr Kevin Kariuki, the African Development Bank’s Vice President for Power, Energy, Climate and Green Growth, noted that mini-grids and stand-alone solar home systems are projected to account for at least half of new electricity connections by 2030, calling Zafiri’s launch timely given that backdrop.
The problem Zafiri is built to address is a familiar one in African energy finance: distributed renewable energy companies often struggle to raise the equity capital needed to scale, even when debt financing is available. Admassu Tadesse, President and Managing Director of TDB Group, framed this directly, pointing to binding equity capital constraints that limit these companies’ ability to draw on longer-term debt, debt that TDB itself has already been extending as part of Mission 300. Equity, in other words, is the bottleneck, and Zafiri is structured specifically to relieve it.
The capital stack and what comes next
The USD 176 million commercial launch is a milestone rather than an endpoint. Zafiri expects to reach a final close of USD 300 million within twelve months, and the institutions behind it have set a longer-term ambition of scaling the vehicle to USD 1 billion. The African Development Bank’s SEFA has provided catalytic junior equity, a structuring choice meant to absorb early risk and make the vehicle more attractive to the commercial and institutional capital expected to follow.
That blended structure, mixing philanthropic, multilateral, and commercial capital, was a recurring theme among the institutions involved. Ghita Benabderrazik, Managing Director of Innovative Finance at The Rockefeller Foundation, described the foundation’s role as bringing catalytic capital intended to de-risk an underfinanced market and help build a more durable financing ecosystem for the sector. Satu Santala, NDF’s Managing Director, framed Zafiri’s task in similar terms: using catalytic financing to draw in commercial capital that has so far stayed away from distributed renewable energy sub-sectors, with the aim of improving outcomes for climate-vulnerable communities.
Ethiopis Tafara, IFC’s Vice President for Africa, emphasized the patience required for this kind of capital to work, arguing that connecting large numbers of people to reliable power demands long-term funding at scale, and described Zafiri as a model IFC developed alongside its co-investors to show what such partnerships can achieve.
A first for commercial banks in the consortium
FirstRand’s involvement marks a notable departure from the development finance institutions and foundations that dominate the founding shareholder list. Mary Vilakazi, the group’s CEO, said FirstRand was proud to be the only commercial bank among the founding investors, positioning the move as consistent with the bank’s long-term strategy of partnering with global development finance institutions and other capital providers to address Africa’s energy needs.
Wayne Keast, Managing Partner at Inspired Evolution, described Zafiri as an innovative multistakeholder partnership forged under Mission 300 that combines the strengths of multilateral agencies, development finance institutions, and philanthropic funders with private sector agility. He said the vehicle’s design, underpinned by country-level compacts, reflects Inspired Evolution’s broader mission of using long-term, patient, blended finance to accelerate energy access for underserved communities, and that the firm is proud to have been selected as the private sector investment manager to implement Zafiri across the region.
Charles Coustan, Portfolio Manager at the MacArthur Foundation, pointed to the scale of the underlying need, describing the expansion of clean, reliable, and affordable energy access as a critical global economic development challenge, and said the foundation was keen to work alongside other impact investors on a vehicle designed to accelerate capital flows toward that problem.
Zafiri’s launch lands at a moment when off-grid and mini-grid solutions are increasingly seen as central, rather than supplementary, to closing Africa’s electricity access gap. Hundreds of millions of people across the continent still lack reliable power, and grid extension alone has proven too slow and too costly to close that gap on its own. Distributed renewable energy companies offer a faster path in many rural and peri-urban areas, but they have historically struggled to attract the patient equity capital needed to grow beyond pilot scale.
Whether Zafiri can mobilize the additional commercial capital needed to reach its USD 1 billion ambition will likely depend on how the vehicle performs over its first investment cycles, and on whether the blended finance model, mixing catalytic junior equity from institutions like SEFA with capital from philanthropies, multilateral banks, and now a commercial bank, can demonstrate the kind of returns that draw in more traditional investors. For now, the vehicle represents one of the more structurally ambitious attempts to solve a financing gap that has long constrained the pace of electrification across sub-Saharan Africa.